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Tuesday, 16 April 2013

NBN: Coalition needs to fess up to its role in getting here AND still could take the high-ground on Policy

Renai Le May is an excellent Tech Journalist who pulls no punches and his latest piece "The Coalition's policy is a sensible NBN Alternative" is full of Political reality and Technical insight. Worth a read just to hear the story from the trenches. Renai would like Fibre everywhere, but admits, it may not be politically possible and we can live with it...

Fair enough. Turnbull has in just 3 years turned around not only Tony Abbott, but the whole Liberal Party. Fair effort with a normal organisation, pretty impressive in a Political Party.

My observation is three-fold:

We didn't get here, needing a Big Bang Fibre rollout, overnight. For the last 30 years Telecomms planners have known and expected Digital Convergence would arrive and it could only be delivered (for fixed-line) over Fibre. It took a lot of small steps and good intentions to get here.

Just like Y2K, a Big Bang project was easily avoidable AND for nearly zero incremental cost, if leaders had started when the problem/solution was identified. Telstra started deploying Fibre-to-the-Kerb (now called to-the-Node) twenty years ago. With its RIMs, it has a massive FTTN network already and 2 decades of real field experience. Including "what bits wear out, how often".

The Coalition needs to fess up to its part in creating this mess. From 1996-2007 it sat on its hands and didn't direct Telstra to look to the future, i.e. right now. Instead, it tried to cash in on it... That didn't go nearly as well as it could've either.

The Big problem that nobody is addressing is stark and simple:

Is $30-50 billion spent on an NBN not a good use of that money, but the best use of it.

Post-GFC, we have a rather larger set of economic and social issues on the agenda. There is a huge need for an NBN, the sooner the better, the faster and cheaper the better. When data is cheap, speeds generally "unlimited", then different people will suddenly discover really neat ways to create great results. Think Print Media vs On-line Advertising, think Bricks and Mortar vs E-tailing. Given a good infrastructure, good business people will create new opportunities for themselves - providing value to consumers.

There are a huge number of issues about deploying a National Network: Governance, Accountability, Efficiency and getting value from recalcitrant contractors are just the start.

That debate hasn't even started. It is common for both parties.

But should money from the NBN be better spent on the NDIS, Gonski reforms, Improving Teaching standards and effectiveness, Immigration Control and Resettlement, Health, Policing, Defence, or a host of other pressing problems over the length and breadth of this Wide Brown Land.

Turnbull has moved mountains in getting bipartisan agreement that there has to be an National Network.

He and the Coalition can take the high-ground in this Policy area very simply and very quickly:

Everyone now agrees a National Network is needed,

the only question of merit is: How to Fund it.

If 75+% of the electorate is mad for Fibre, then make them put their money where their mouths are...

If people won't stump up cold, hard cash for "something they absolutely have to have", then they aren't serious.

But if whole NBN can be funded outside the Federal Government cash machine, then not only do the people get what they are screaming for, but it takes the pressure off both sides of Politics.

This is the high-ground that Turnbull can take. Change the question to "Funding: If you want Fibre, you have to pay for it". I don't mean a 'free' DSL connection and $5,000-premise upgrades, but a single, maximally efficient rollout.

There is a mountain of Superannuation Funds out there looking for a good use: $1,500 billion and growing. In just two years, the commissions paid to Financial Planners on these funds would wholly pay for the best NBN we could have.

So, can Mr Turnbull pull another rabbit from the hat and come up with a way to fund the NBN that has bi-partisan support, doesn't need Big Government and gives us a great network for a great price.

What most people don't understand is Telco economics: for every $100 NBN Co collects, over $75 of that is pure profit. But most of that is sucked up in Capital Costs (paying interest, raising more money) and Depreciation. If we could change the rules of the game for funding the NBN, we'd also end up paying a whole lot less for its services down the track.

Imagine for a second if Turnbull came up with a way for us to have our NBN Cake and eat it too.

It would put Abbott and the Coalition in an unassailable political position and forever take the heat off the Coalition about the NBN: Nothing to do with us, that's what you wanted and paid for...

There's a rule in business: give someone good service and they'll tell a few of their friends. Give them bad service and they'll tell everybody they ever meet!

The better Customer Service companies know this and take especial effort dealing with complaints.If they can turn-around bad experiences into good ones, these people will become lifelong advocates for you.

That's the dynamic that Turnbull and the Coalition should be seeking to utilise. Only the Labor party is wedded to a position, the Coalition has flexibility and if it can show agility and adaptability now, it bodes well for their term in government.